How much will be in the Prepaid Insurance account at the end of the year, after the adjusting entries have been prepared and posted

Question

asked Sep 2, 2021 198k views

1 Answer

Aj Entity · Answer 1 · 2021-09-07T01:41:49+0000

Answer: $8,400

Step-by-step explanation:

The $9,600 is for 2 years in advance. This can be apportioned per month at a rate of;

= 9,600/24

= $400 per month.

October to the end of the year is 3 months so;

= 400 * 3

= $1,200 will be recorded for the year.

Prepaid Insurance will therefore reduce to;

= 9,600 - 1,200

= $8,400